The Taxpayer First Act was signed into law on July 1, 2019. The act includes a provision that persons receiving tax return information must obtain the express permission of taxpayers prior to disclosing that return information to any other person.
Due to the law, if a lender or a servicer obtains tax return information during the origination or servicing of a mortgage loan, the lender or servicer must obtain express consent from the taxpayer to be able to share the tax information with another party. The sharing of the tax information would include the actual or potential future owners of the loan, such as Gateway, Fannie Mae, Freddie Mac, etc.
The IRS has indicated it has no plans at this time to provide a standard form related to disclosing or sharing tax return information with other parties. However, the Mortgage Industry Standards Maintenance Organization (MISMO) drafted a sample Taxpayer Consent Form designed to allow seller/servicers to share tax return information with other loan participants. This form is available to both MISMO and non-MISMO members on their website. Sellers may also prepare their own taxpayer consent form, as long as the form provides the seller with express permission to share tax return information in accordance with the law.
Effective with notes dated on or after 12/28/19, Gateway will require all closed loan files to have this permission in order for the loan to be purchased.
Please direct any questions to your Regional Sales Manager